Data Center Development Accelerates on Army Bases

Army Seeks Private Partners

According to Bisnow, the US Army is partnering with private equity firms KKR and Carlyle Group to build large data centers. The effort responds to rising demand driven by artificial intelligence.

Carlyle will develop a data center on 1,384 acres at Fort Bliss in Texas. Meanwhile, KKR’s affiliate CyrusOne will build a similar facility on 1,201 acres in Utah’s Dugway Proving Ground. Each project carries an estimated cost of $2B. Together, these developments mark an early step in a broader push to expand the Army’s IT infrastructure.

Significant Long-Term Projects

The Army will lease the land for 50 years without direct investment, while retaining rights to a portion of each facility’s capacity. The Fort Bliss project will include 2.5–3 GW of capacity, self-contained power generation, and a closed water system, with operations targeted for fiscal year 2027. The CyrusOne-led Dugway site will add another 1 GW by FY 2029, supporting continued tech growth within the military. Both facilities still await final lease agreements. This structure mirrors how major investment firms continue to scale infrastructure through long-term capital strategies, including recent moves to deploy billions into real estate and related assets.

Growing Data Center Hubs

These projects highlight the growing importance of data center development across rural Texas. Developers built nearly 3.4 gigawatts of capacity between 2017 and 2024. Abilene has become a major hub for new capacity. It now outpaces traditional markets like Northern Virginia, partly due to large AI initiatives.

Meanwhile, the Pentagon set its 2026 cyber budget at $15B, marking a 4% increase year over year. This funding will continue to drive strong momentum in data center development.